fbpx
A view of tower blocks in Glasgow with maisonette housing in the foreground

Social Housing Costs Jacked Up

Leo Plumb

Housing issues were not solved by the emergency rent freeze and eviction ban, first introduced in October last year. Minister for Tenants’ Rights Patrick Harvie can call this policy whatever he likes. This January, he maintains that an extension of the policy continues to support prices for renters. No one is fooled, the price of rent is hiking up in order to warm the relationship between landlords and the Scottish Government. 

The emergency legislation was introduced to help tenants with the cost-of-living crisis. It cannot be said enough that this rent freeze was entirely won with pressures from campaigners,  tenants and prominent political voices against the mounting pressures on the poorest in society.

At the time, It felt like a genuine action was taken. One that acknowledged how the rental sector had been growing rapidly sicker. The alarm was raised over many consecutive years. Now it feels like the destructive status quo has been restored with almost no time passing at all.

Rewind a few years to around 2018-2020, In Glasgow, many people including myself joined street campaigns with Living Rent. The activity was speaking to people about housing on their level to draw out local issues and solutions. As Housing Associations consulted on rent increases, I remember Govan in particular. There tenants backed a 0% rent rise with determination. Zero as in; no rise whatsoever at all for that year. 

Such an option to vote for “no increase” is never offered on the consultation ballots put out by Housing Associations to their tenants each year. And so this alternative version, with hundreds of submissions was submitted unofficially by the Tenants’ Union instead.

During the campaign I met one man who was in his late 60’s and invited me in. He explained to me he had a steady pension, he knew fortunately he could personally squeeze by with an increase of 2% or maybe 3% that year. This would be the last time he could manage it. But he showed me some hand written calculations, which he pulled from his top drawer dresser. He’d calculated the year on year increases over 22 years. He said “The money goes up and up and up but I still live on the ground floor” Under that he had written a list of his local friends in the same scheme. He said he’d phoned many of them just after the consultations had dropped through their letter boxes. This man agreed that despite his relatively stable situation any rise to rent costs was now unjust. This was all before the pandemic.

By the end of 2022, the crisis of unaffordable rents was a critical patient and was getting sicker. It was brought to the operating table for emergency surgery. The Scottish Government stepped in. It was anaesthetised and sent home, drowsy. Only to receive a letter outlining that -in fact- “No surgical work was ever carried out, a rent freeze was administered instead.” But now our patient is told “It will wear off. No follow up required. We recommend ibuprofen.”

Today the prescription for private renters is still just pain relief. The Scottish Government maintains that it is extending emergency provisions, but it has given the green light to Landlords to make a 3% increase to rents from April 1st. Property owners who manage their letting or employ an agent can now also apply to double that cash if they feel the additional inconveniences from other rising costs. This is not a freeze.

The real story I can see (besides the sticking plaster of a policy which froze barely anything for any time), is outrage spreading amongst social tenants. Given the direction of travel, there is a sense of bewilderment in these communities. 

Where the, so-called, extension of the freeze has left a ‘cap’ on what private landlords can charge, those living in homes run by Housing Associations face rising payments many cannot afford. Registered Social Landlords (RSL’s) are permitted to increase rents by as much as 11.1% following the announcement by Patrick Harvie. Quite a few Social Landlords propose to increase them between 6 – 9%. This is Glasgow, but the national picture will apply similarly to your your local area as-well. 

Just like private renters, many social tenants have weathered this crisis with every ounce of strength they can. They belong patiently to the Housing Associations. They have become increasingly resourceful and make sacrifices to try and meet payments that were unaffordable years ago. Entering the stairway of any block of social housing you would meet people who work part time, low paid work. The announcement last week no longer protects a vast number of people in this situation.

Scottish social tenants are supposed to access the lowest costs in the rental sector. So why is it that in 2023 they may be made even worse off than some private tenants in secure employment?

To pursue that line would be to give ammunition to the lobbies who overall want to keep profit margins up in the housing sector. That question simply exists because of ill-thought through and cowardly policy change. At my most cynical I would say the Landlord lobby are preparing to weaponise the status of different types of renters in a way which is entirely self-serving. As their current legal action indicates

The division between people in social or private housing is not the issue, they should stand united today after all they are often direct neighbours. In truth, both are being screwed. Yes, by their landlords but more importantly by the Scottish Government who have failed to reassure all who face rising costs. The SNP and the Scottish Green Party initiated a rent freeze then lifted it with no alternative strategy in place.

More specifically, during the intervening weeks of the freeze, these officials have not illustrated any further plans for rent controls nor planned a programme of economic stimulus ready to fund the stable, affordable housing system that Scotland needs. It begs the question was the rent freeze simply a stunt? 

If there’s one widely repeated perception about the political crisis instigated by Truss and Kwarteng it is that they helped to expose a deeply uncomfortable truth about how all governing parties woo the social middle of society. When home and mortgage owners felt their own interests struck by the mini budget, it started immediate political unrest.

This upheaval contrasts to the slow decline of standards for renters in the UK. A political message is fed to home owners which sounds something like: “You need not worry. This type of instability is not intended for you. For a moment there we made a mistake and let the boundaries blur but we have returned the separation to its normal state, the poor will take the instability once again”

In Scotland, the message received is the same. Carolyn Lochhead, Director of Public Affairs for the The Scottish Federation of Housing Associations (SFHA) said last week “Our members are consulting with tenants on a range of rents significantly below the current rate of inflation, which will protect tenants during the cost of living crisis.” Yes that’s right the word “protect” was used there despite awareness that these are inflated prices nonetheless. She failed to remind us that the management of Housing Associations publicly opposed the Scottish rent freeze in the first place.

Protections of any kind are at an all time low as The Herald this week warns that the lifting of the eviction ban puts social tenants directly in the crossfire. Those who are at most risk of homelessness, have undoubtedly got most experience of what can improve the system. Around them are people who are no less precariously positioned. Some are partially masked from the increasing costs because of housing benefits. If their circumstances change though, they join the most vulnerable class. This occurs because as the baseline in rent rises around them, so does the basic affordability of living in the area at all. They will only realise the change when their benefits cease altogether (they spend nights praying this doesn’t happen) or their first payslip in a new job gets absorbed by rent immediately. Everyone renting such a property has become alienated from the actual cost of being part of their own community.   

This is exactly what Common Weal has long argued should be avoided. Social Housing should be a primary offer to people’s living needs. Scotland can grasp an antidote to this emergency if we make affordable houses for public rent now. If the Scottish Government is considering the investment seriously, it will take steps toward a revised property tax and a rebalancing of land value in favour of local communities; To fund and build environmentally sound housing where it is required.

It looks like this is not underway, so you would be right to ask what will happen next? Well in short i think there will be further resentment toward Housing Associations from all sides. They claim that the running costs for their services cannot be met by any other means other than upping rents considerably. Tenants have known this position since before the freeze took place, letters to this effect landed on their doormats. 

If you have lived in a home within a Housing Association, you will be familiar with the regular communications which explain the refurbishments your Social Landlord is delivering. They are a kind of ‘you said-we did’ customer feedback pamphlet. It reads: “Here are the the ways we are investing in your community: Carrying out repairs, giving fuel advice to tenants, installing new signage around the block” It is the very collective and accountable nature of these services which make a social rent appealing. However, it is also these costs which Housing Associations say are rising more rapidly than rent can cover. 

The pamphlets issued this week ask tenants to vote on how much of an increase they would prefer. 4%, 5%,6% (no zeros) However, Imagine being asked to cast your vote, not on which services you would to see more of: Double glazing, clearing mould, fixing extractor fans but rather on which you would be willing to lose, to ensure levels of rent you already can’t afford. 

Let’s expect to see a period of hostility building towards the Housing Associations. All the while the rates they set will make private landlords lobby the government to equalise in their part of the sector. Tenants’ Unions like Living Rent, alongside all other organisations who can see this is wrong must strategise carefully at this stage. Wider demographics in society need to agitate for immediate change and set the terms to ensure a roll back doesn’t happen again. The wish for carefully planned Rent Controls has never been more vital; a system which brings down rents rather than anaesthetise them. The narrative which has been undermined this week, let’s correct it: that Social Rents must succeed and provide for people in Scotland, Rents must come down. 

If you are in a position to find out what is happening in your local area regarding social rents whether you are a tenant or not, it is worthwhile doing so. The picture across Scotland is unclear. Common Weal would like to hear from you. Email leo@common.scot

6 thoughts on “Social Housing Costs Jacked Up”

  1. Home in Scotland are putting up rents by 7% from 1st April. Absolute disgrace for so called social housing. It will take my rent to £565 per month, more than many in the private sector. I have raised this and expressed my disgust along with their poor service, they want to chat. Total joke these so called social housing providers. Since 2010 my rent has increased by more than double my pay rise. Empire building and the Scottish Government do nothing. All social housing should be Council run to at least have some accountability.

  2. Ian Davidson

    Good article. Patrick Harvie should be held to account by his Scottish Greens as he is just another self-promoting (sic) politician who has failed to deliver. Power always corrupts so it should always be dispersed as widely as practicable. As Robin has pointed out on many occasions, Scotland is run by and for “middle class” interests including landlord msps! Following a vegan diet & riding a bike does not per se make one a socialist committed to genuine economic + social equalities!

  3. Bruce Hosie made an interesting point so I looked into Home in Scotland to find out more. It appears they took in £293M in rents during year 2021/22 and had costs of £280M (with the surplus being reinvested in the housing stock). With inflation above 10%, it is not difficult to see how a zero rent increase would lead to the organisation having to cut back on repairs in order to balance their books which is not what we want. The plain fact is, a 7% rent increase is not unreasonable when inflation is over 10% – the problem comes from the fact that wages are not increasing at the rate of inflation so those people not living on inflation linked state benefits will be finding their income is being cut in real terms. I do not believe transferring the control of the housing stock to Councils would make any difference to this problem since Councils’ Housing Revenue Accounts also have to balance – the issue that has to be addressed is the fact that working people are seeing their wages cut in real terms. In everyone’s wage was increasing by 10%, no one would be thinking a 7% rent increase was disgraceful.

  4. Adrian Fletcher

    Whilst GHA Wheatley (Scotland’s largest social landlord) and their propaganda arm at the SFHA are saying that a rent freeze would be “catastrophic” for them, they continue on their own website to boast that “Wheatley’s financial position continues to go from strength to strength,” and that “Our business is positioned strongly, with… significant liquidity resources.”

    Something clearly doesn’t add up, yet Patrick Harvie and ScotGov thinks that’s ok.

    https://www.wheatley-group.com/investor-relations/publications/investor-updates

  5. Home in Scotland (like my landlord Caledonia HA) is “one of the larger developers of new affordable housing in Scotland.” (SHR). This means their tenants are making significant interest payments on mortgages. Interest payments that go up as interest rates goes up. However, all the credit for new social housing is taken by Scottish Government. If SG took as much responsibility for the cost of new social housing as they take the credit for, then Home in Scotland would be able to keep rent increases lower. What’s more, if Tenant Participation Laws were enforced many housing association’s costs would be less because they would be more efficient.

Leave a Comment

Your email address will not be published. Required fields are marked *

Shopping Cart
Scroll to Top